SPEECH - Axing charities regulator will hurt consumers - 4 March 2014

Posted by Andrew Leigh MP5sc on March 05, 2014

Last night I spoke in the Parliament about how Australia's first independent charities regulator is providing an important service to consumers and donors. Scrapping the Australian Charities and Not For Profits Commission will make members of the public more vulnerable to charity scams.

DR ANDREW LEIGH: In November last year police in Mackay alerted local residents to a scam that was taking place. Residents around Andergrove in the southern suburbs reported people doorknocking, posing as collectors for Autism Queensland. They were attempting to get bank details from vulnerable residents. Autism Queensland had no collectors in the area.

This story of scammers posing as charitable collectors is sadly not an isolated incident.

Last month, ABC's 7.30 uncovered a children's education charity which had received nearly $1 million in donations but could not or would not say where some of those funds have gone. In other developments, scammers targeted Australian households last year with emails asking people to donate to phony bushfire appeals.

I am passionate about standing up for consumers and I know my friend and colleague the shadow parliamentary secretary to the shadow Treasurer is too. If we are to stand up for the interests of consumers then we need an organisation that will report dodgy dealings by charities, and that organisation is the Australian Charities and Not-for-profits Commission.

In its first year, the compliance team at the ACNC received and assessed 202 charity related concerns, an average of 17 a day—not bad for an organisation whose public profile is just beginning to rise. Eight of those cases, according to the ACNC, involved investigations of serious matters of fraud and governance, including one case involving allegations of serious mismanagement and fraud at a charity where a husband and wife were directors on the charity's board. As the ACNC review noted:

The couple took over the charity initially with the support of the members and existing board. However, many members cancelled their membership following the couple's increasing abuse of their position within the charity.

If we are to ensure that we have a strong charitable sector, we need a strong ACNC to which complaints can be directed.

The analogy here is with the Australian Securities and Investments Commission, ASIC, which underpins investor confidence and ensures that investors can put their money into firms knowing that there is a basic set of rules and an agency to which problems can be reported. The government, for its own heavily ideological reasons, wants to scrap the ACNC.

There is not only that; they are still committed to getting rid of the statutory definition of 'charities'. That is right: the government would currently prefer to go back to case law from the 1600s to determine what is a charity rather than having a simple, straightforward definition. Do we want to return to a set of laws that were drafted before flight, before cars, before electricity and before the telephone? It seems very strange to go back to a set of laws that predate the industrial revolution to define 'charities'. I call on the government to back off and to support the statutory definition of a charity.

I call on the government to engage with the charitable sector, who overwhelmingly have supported the ACNC. After all, the ACNC came out of a Productivity Commission review. It has been backed by four out of five charities in surveys. Tim Costello has said:

The commission is actually working for us and it gives the public confidence, it underpins the consumer benefit to charities.

Carolyn Kitto, with the charity STOP THE TRAFFIK!, has written to my office in the following terms:

The ACNC is a dream come true for small charities. We don't have the range of expertise needed to manage the ATO and ASIC, we do not have the time to do compliance for many different groups, nor can we easily stay on top of changes in regulations. The ACNC has cut the red tape dramatically.

As you would expect, given that the ACNC has a red tape reduction and reporting directorate. A government committed to tackling red tape should be a government that is proud to support the ACNC. It is an idea that originated with Prime Minister Howard and ought to enjoy bipartisan support.